[DO NOT PUBLISH] IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT

________________________ No. 17

- 15513 Non

- Argument Calendar

________________________ D.C. Docket No. 0:16

- cv - 61911

- UU

U.S. BANK NATIONAL ASSOCIATION, as Trustee successor in interest to Bank of America, National Association as Trustee as successor by merger to La Salle Bank and WAMU Mortgage Pass Through Certificates Series 2007

- HYS Tr ust, Plaintiff

- Appellant,

versus HANS HENNING LARSEN, SHARON JANICE WALKER, VILLAS OF PEMBROKE LAK ES ASSOCIATION, INC., UNKNOWN TENANTS, NOVA PROPERTIES, LLC, et al., Defendants

- Appellees.

________________________ Appeal from the United States District Court fo r the Southern District of Florida

________________________ (May 25, 2018) Case: 17-15513 Date Filed: 05/25/2018 Page: 1 of 72 Before MARCUS , MARTIN, and ROSENBAUM , Circuit Judges.
PER CURIAM: U.S. Bank Na tional Association appeals the grant of summary judgment in favor of Max and Smadar Hefte r in its action relating to a parcel of real property owned by the Hefters. U.S. Bank argues the district court erred in holding the
doctrines of merger and res judicata barred it from foreclosing on the Hefters ’ parcel , when that parcel’s legal description was left off of a mortgage already foreclosed upon by U.S. Bank

. After careful review, we affirm.
I. This case is about two parcels of land in Florida, referred to as the “ Vacant Parcel ” and the “ Improved Parcel. ” The Vacant Parcel has no structures, while the Improve d Parcel has a house and a barn on it. In 2004, Hans Larsen and his wife, Sharon Walker, purchased the Improved Parcel. In 2005, Larsen alone purchased the Vacant Parcel. Then , Larsen and Walker mortgage d both properties in the amount of $980,000

. In 2 007, Larsen and Walker refinanced the loan , executing a note and new mortgage in the amount of $1.3 million

. U.S. Bank’s predecessor trustee held both the note and the new mortgage. The old mortgage included the legal descriptions of both the Vacant and Improved Parcels. But the new mortgage listed only the legal description of the Vacant Parcel. It is true that the new mortgage contained some ambiguities as to

Case: 17-15513 Date Filed: 05/25/2018 Page: 2 of 73 what property it covered, containing the parcel number of the Improved Parcel (not the Vacant Parcel) , and an address that served both parcels. The parties to the new mortgage all agree that it was intended to encumber both the Vacant and Improved Parcels. In July 2008, Larsen and Walker executed a quitclaim deed conv eying the Improved P arcel to Larsen alone. Larsen then defaulted on the mortgage. As a result , U.S. Bank’s predecessor trustee filed a state court action to foreclose the mortgage. The pr edecessor trustee also filed a notice of lis p endens, which included the leg al description of only the Vacant Parcel, matching the legal description in the mortgage. In March 2014, U.S. Bank entered into a settlement agreement with Larsen, who consented to a final judgment of foreclosure with a waiver of deficiency. In April 201 4, a judgment of fo reclosure was entered in favor of U.S. Bank for $1,853,687.49. In September 2014 , U.S. Bank got a title certificate that included the legal description of only the Vacant P arcel

. In November 2015, Larsen conveyed the Improved Parcel to Nova Properties , LLC for $25,000. The Hefters are the sole managing members of Nova Properties

. Larsen said he told the Hefters that the Improved Parcel was encumbered and belonged to U.S. Bank before transferring it. The Hefters deny being told abo ut a ny potential encumbrance. In December 2015 , Nova Properties conveyed the Improve d Parcel to the Hefters. U.S. Bank introduced expert

Case: 17-15513 Date Filed: 05/25/2018 Page: 3 of 74 testimony suggesting that fair market value of the Improved Parcel at the time it was sold to Nova Properties was $46 0,000

— close to 20 times what Nova Properties paid for it. At some point, U.S. Bank realized it only had t itle to the Vacant Parcel, which its expert estimated t o have fair market value of merely $48,000. But U.S. Bank did not seek to modify or vacate t he state court foreclosure judgment. Instead, in August 2016, U.S. Bank brought suit against the Hefters in federal
court. 1 U.S. Bank sought (1) declaratory relief that it holds a valid enforceable mortgage against the Improved Parcel; (2) reformation of the mortgage to include the legal descrip tion of the Improved Parcel; and (3) foreclosu re of the mortgage against the Improved P arcel. In the alternative, U.S. Bank sought foreclosure of an
eq uitable lien and to set aside the settlement agreement with Larsen

. On October 13, 2017, the Hefters moved for summary judgment. The district court granted the Hefters’ motion for summary judgment , determining that U.S. Bank’s claims were barred by the doctrines of merger and res judicata . This appeal followed.
II. We review de novo a district court’s grant of summary judgment. Edward Lewis Tobinick, MD v. Novella , 848 F.3d 935, 943 (11th Cir. 2017). The grant of

1 U.S. Bank initially brought suit against a number of other parties as well, but only claims against the Hefters remain for purposes of this appeal.

Case: 17-15513 Date Filed: 05/25/2018 Page: 4 of 75 summary judgment is appropriate when “ there is no genuine dispute as to any material fac t and the mov ant is entitled to judgment as a matter of law. ” Fed. R. Civ. P. 56(a). Questions of law, including the application of the doctrines of merger and res judicata, are reviewed de novo

. See Batchelor

- Robjohns v. United
States , 788 F.3d 1280, 1 284 (11th Cir. 2015).
III. Under Florida law, the doctrine of merger provides that “the cause of action on the debt and damages recoverable on it merge into any judgment entered on the cause of action.” Whitehurst v. Camp , 699 So. 2d 679, 682 (Fla. 1997) (per curiam)

. After a foreclosure, then, “[t] he mortgage is merged into the judgment , is thereby extinguished, and loses its identity.” Nack Holdings, LLC v. Kalb , 13 So. 3d 92, 94 n.2 (Fla. 3d DCA 2009) (quotation omitted). Once a mortgage has merged into a judgment, no further action can be taken on the mortgage unless the foreclosure judgment i s vacated. Aluia v. Dyck

- O’Neal, Inc. , 205 So. 3d 768, 775 n.4 (Fla. 2d DCA 2016). The district court determined that the doctrine of merger barred U.S. Ban k’s claims. Because the mortgage was extinguished when the state court judgment became final, the district court found that U.S. Bank could not seek modification of the mortgage by way of a federal court action . U.S. Bank argues that merger does not fore close its claims because Florida has long recognized that when a mortgage

Case: 17-15513 Date Filed: 05/25/2018 Page: 5 of 76 covers multiple parcels, the mortgage holder is not required to foreclose on all the parcels at once. U.S. Bank says the mortgage should be read to encumber both the Vacant Parcel a nd the Improved Parcel, and that its previous decision to foreclose on the Vacant Parcel should not prevent it from now foreclosing on the Improved Parcel. This argument fails. The doctrine of merger clearly prohibits a federal action by U.S. Bank to

corr ect an error in the legal description of the property encumbered by the already

foreclosed

- upon mortgage. We find Lucas v. Barnett Bank of Lee Count y , 705 So. 2d 115 (Fla. 2d DCA 1998) , to be persuasive on this point. In that case, the court
wrote: When a mortgage contains an incorrect legal description, a court may correct the mistake before foreclosure. If, however, the mistaken legal description is not corrected before final judgment of foreclosure, and the mistake is carried into the advertiseme nt for sale and the foreclosure deed, a court cannot reform the mistake in the deed and judgment; rather, the foreclosure process must begin anew. Id. at 116. To the extent U.S. Bank seeks reformation of the now

- extinguished mortgage, first, “ the deed to the property must be canceled, and the original foreclosure judgment set aside, such that the parties are returned to their original status .” Id.
In an attempt to avoid this result , U.S. Bank seems to argue it is not seeking reformation of the mortgage b ut instead a declaration that the mortgage always should have been read to cover both parcels. In support, U.S. Bank cites a number

Case: 17-15513 Date Filed: 05/25/2018 Page: 6 of 77 of cases involving mortgages covering multiple parcels or involving multiple lienholders , in which Florida courts allowed f oreclosures to be brought in separate, sequential actions. But it is not obvious from the face of U.S. Bank’s mortgage that it was intended to encumber two separate parcels. The mortgage contained the legal description of one parcel: the Vacant Parcel. And while U.S. Bank points to

some ambiguities in the mortgage documents that could have alerted a close reader to an error in the legal description, U.S. Bank did not raise those a mbiguities with the state court. In fact, the title certificate issued to U.S. Bank mirrored the legal description in U.S. Bank’s mortgage . This effectively r esolved any ambiguity
about what property the mortgage encumbered in favor of what was included in the legal description

. To the extent U.S. Bank’s mortgage contained an erroneous legal description, U.S. Bank should have raised this issue with the state court
before the final judgment of foreclosure , or through a motion to vacate that judgment. See id. The district court wa s correct in holding that the doctrine of merger bars U.S. Bank’s claims seeking to reopen proceedings on a mortgage that has been merged i n its entirety into a judgment. We do not therefore reach that court’s alternate holding that U.S. Bank’s claims wer e also barred by the doctrine of res judicata.
AFFIRMED . Case: 17-15513 Date Filed: 05/25/2018 Page: 7 of 7